Reimagining Employee Benefits

Recently I was asked to do presentation at the Toronto Regional Board of Trade. The topic was retaining employees using employee benefits and technology. The topic is very front and center with wellness as the side dish if you will.

Today there is much ballyhoo in regards to wellness. Interestingly a recent Sanofi Health Survey reported the top two items employees wanted out of a wellness program were flexible work hours/schedule and healthy snacks available at the workplace. Both of request items don’t directly relate back to an insurance provider or a traditional benefit framework.

Today, more than ever, employees want more but are hard-pressed to relate an answer to what “more” is. This is in part to our current state of changing demographics. The benefits industry has been driven for a very long time by the baby boomer generation. In three years, 50% of all workers worldwide will be Millennials, defined as those born between 1980 and 2000. Not only is this a significant shift in physical health requirements but more so in the psyche of the employee.

Millennials are fascinated with the term “wellness” and all that it brings to the table. From in office yoga sessions to healthy food stations, these are quickly becoming expectations of new employees. However, this creates an interesting dilemma for employers who tend to have set budgets and are struggling as it is to keep up with benefits industry inflation. If the cost of drugs is rising and mental health is an issue I need to help my staff with, where do I find the money for preventative measures or feel good aesthetics?

There is little doubt our industry is in the midst of some disruption. There are start ups entering the space every day with advanced technology claiming to have reinvented benefits. At the end of the day most have simply “repackaged” existing products into a glossy web application.

The issue no one talks about is where does the employer’s responsibility lie. To a disabled employee with no coverage but yoga classes at the office they offer little solace. To a diabetic with healthy snacks but no drug coverage they might help them control their sugar but who’s paying for their insulin? There is a movement afoot to offer more healthcare spending accounts and lifestyle spending accounts but will these come at the cost of real insured items?

A fairly safe statistic is that better than one in three employees will have an episode of either disability or suffer a critical illness during their working years. Do we gamble that away to feel better now?

The other side of this equation however is that if we promote healthier choices and provide lifestyle help for our employees do we not improve claims as a by-product? In addition, healthier employees are significantly more productive than unhealthy employees. Wellness comes in three areas for the most part, physical, mental and financial. The employer can play a part in all three.

So, how do we balance the fact that today, 60% of all employees have a chronic illness or disease. The highest reported ones being cholesterol, hypertension/high blood pressure, depression/mental health issues, diabetes and arthritis. Many people have multiple particularly where they’re related auto-immune issues. Ironically 90% of these chronic illnesses can be prevented with healthier choices related to weight, smoking, alcohol and drug dependency and fitness activity. So, in theory by maintaining healthier lifestyles for employees, employers could reduce their insured benefit costs by at least 60%. That’s very appealing!

There in lies the conundrum. The chicken or the egg. What comes first, the prevention or the treatment. If an employer just moves to the healthy wellness preventative side of benefits who is looking after the 60% of their staff that need help now for their chronic illnesses to get them healthy or at least maintain their current lifestyle. Very few firms have the budget to accommodate both immediately.

That’s where we are today. Companies are being more progressive, Facebook recently announced a doubling of time off for their bereavement policy. These are things firms can do on their own. Creating a more comfortable workspace for employers and more opportunity to work at home for a day if their child is ill or they have a PA day can all have positive benefits for both the employers and the employees. Contracting a provider to bring in fresh fruit or snacks to the office a couple times a week has a relatively low cost to the added productivity it creates.

Ultimately as firms retire more boomers and hire more Millennials this is the way to evolve. This will be a slow gradual evolution as it would be foolhardy to remove insured elements that truly protect employees for the sake of one extra massage a year or a gym membership. A way to tie them in might be to encourage healthy goals and tie them into benefits or compensation. I see this as the evolution of benefits as we know it. If baseline claims can be reduced by bonusing a staff member on their FitBit results, then I believe firms will adopt these practices. Not only do they manage inflation out of their benefit plans but they also have more productive staff as a result.

Combining this with the smart management of drug costs through programs like the Chambers Plans Managed Health Care offering and more dovetailing with provincial catastrophic coverage will allow firms to make the transition. Firms will need to find an advisor who can guide them through the pitfalls as these evolutions occur. So, while there’s nothing new about anything you’re hearing about, managing it and evolving where you are today will have long term benefits for your employees and your budgets.

Completing the change will be advanced technology. Already the Chambers Plan’s “my-benefits” application will allow an employee to go their chiropractor, look at their Android app to see how much coverage they had left, take a picture of their claim and the claim would be deposited in their bank before they got home from work the next day. Tying in other measuring technologies to stop smoking or be more physically active is the next step and one we will no doubt see soon.

So, everything old is new again, just repackaged with glossy applications. Yet it’s still an evolution as the weighting of coverage will begin to shift from chronic care to prevention and general wellness. Firms and insurers will have to keep up.

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